Vladeta Marjanović, Chairman of the Innovation Fund’s Investment Committee: We are good at engineering, but bad at selling ideas

IMG_0613In about a decade, some of the family businesses in Serbia will grow into large enterprises which will make the country proud. However, in most innovative projects, the go to market and sales plan looks as if the Berlin Wall hasn’t fallen yet: we first plan on selling in Serbia, then the former Yugoslavia and ultimately in the former USSR. If one’s market approach is based on countries of the past, then the plan behind it also has a great chance of quickly becoming a plan of the past.

Vladeta Marjanović is a man with “multicultural” curriculum vitae. He was born in Užice, Serbia, graduated from the Faculty of electrical engineering in Belgrade, ventured into the global market via Western Europe and from there, more than ten years ago, moved to the US. Today he works as a senior director at Cisco, in charge of Go to market business development and IT architecture for international technology companies whose market worth is measured in billions of dollars. In the Silicon Valley, he has several “extracurricular” activities: he is the chairman of Association of former students of the Faculty of electrical engineering, which helps talented students coming from this faculty as well as other schools in Serbia, and in Serbian public he is often presented as an “engineer in the world of business”. Answering the questions of reporters on what the Serbs lack in their business forays into the global market, Vladeta states that businessmen in Serbia are masters of long monologues, but mere apprentices in listening to the other party and feels that “we wouldn’t be any less Serbian if we finally comprehend that we need to offer our goods to international buyers in such a way that the buyers instantly understand it, instead of us trying to explain specific Serbian traits.”

Over the past two years, Marjanović has been cooperating with Serbia’s Innovation Fund, acting as chairman of the independent Investment Committee that decides which projects will be approved for financing. His motivation to embrace this role is, according to him, very simple: without innovation, there can be no strong economy, and without a strong economy, there can be no strong Serbia. By the end of this month, Serbian companies can apply for a new round of financial support which the Innovation Fund provides for innovative projects, and to the question which are the most important criteria for project selection, our interlocutor says: “There are no “most important” criteria. The following aspects are being evaluated: the value and possibility of protecting the innovation, experience of the management team in charge of implementation, potential on the global market, potential for revenue and sales growth and cooperation with international partners, financial forecast, development plan, adequate use of budget resources and both the business and technological risks.”

BIF: What are the most common shortcomings of projects proposed by Serbia’s innovators?

Vladeta Marjanović: Most of them focus too much on development and often neglect the go to market plan, as well as cooperation strategies with their partners. The financial plan often looks amateurish, lacking details about expected annual revenue and profit over the course of a couple of years. Also, many a projects ‘go to market and sales plans look as if the Berlin Wall hasn’t collapsed 25 years ago: we will first sell in Serbia, then the former Yugoslavia and ultimately in the former USSR. If one’s market approach is based on countries of the past, then the plan behind it also has a great chance of quickly becoming a plan of the past.

BIF: And what are the advantages of those projects which have been approved for financing?

V. Marjanović: Good knowledge of the market(s) they plan on penetrating, European and global potential of their products, innovativeness and the ability to protect one’s IP, as well as the ability to effectively present their ideas. These projects have a more professional feel to them, the idea is clear and there is a well-designed and outlined plan of activities. We (Serbia) are an environment that always produces great ideas, but we’re often unable to bring them to fruition. When you see a project that has a good idea and a great implementation plan, it looks significantly better than a project with a great idea, but with no clear implementation plan.

BIF: How would you compare Serbia’s innovation potential with the situation in the States?

V. Marjanović: So far, I’ve evaluated over 400 projects in Serbia, out of which around 150 came from the IT industry. I would say that about five or maybe six of those have the potential and quality matching the best projects coming from the Silicon Valley, but we’re still missing the quality of idea presentation and a good plan on how to implement it. We are good at engineering, but bad at selling ideas. In the Silicon Valley, it’s almost vice versa – it is indeed important to have a good idea, but it is even more important to be able to explain and present the idea to investors.

BIF: Do the project proposals at the Innovation Fund indicate any special potential in a particular sector?

V. Marjanović: Two things are often present in most of the projects and this makes me optimistic. First, I am very glad to see that the IT sector is striving towards global quality and that the people in that sector are ready to compete on the global market. They work really hard and this will soon lead to tangible results – Serbia will keep on increasing its export of both software and raspberries. Second, it is obvious that the industrial knowledge is still present and that the “renaissance” is being driven by private family companies whose members have previously worked in major industrial complexes, and when they lost those jobs, they started again from scratch, but together and united. In a decade or so, some of these family businesses will become large enterprises which Serbia will be proud of.

BIF: Besides the energy sector, agriculture is considered a globally important strategic area which will be a very prominent investment target. Have you encountered any significant innovations coming from this field?

V. Marjanović: Yes, and some of the projects from this sector have been approved for financing. These are mostly projects regarding seed production, fruit and vegetable processing and production of agricultural machines and mechanization. I personally feel – watching my kids enthusiastically going to the town’s green market in Užice – that production of healthy food is a tremendous potential for Serbia’s development.

BIF: Do the stock market trends and the related shifting of investors to meet these trends influence favoring innovations in certain industry sectors?

V. Marjanović: The innovation market is actually a capital market which invests into innovation. Every market is regulated by balancing supply and demand and there have been only a couple of examples of people, companies and ideas which have succeeded in spite of ignoring the market and its trends.

BIF: Does the specific potential of a local environment influence the possibility of innovations coming from a certain sector having an easier way of finding financing?

V. Marjanović: The answer to this question is neither simple, nor universal. Some sectors are local just by nature of things and their corresponding markets, some are regional or global. Different sectors have different growth stadiums, and the innovations within them are also in different phases. Serbia, and even the region, is a small market for global financiers dealing in the innovation sector.

BIF: What could the small companies use to their advantage when competing with large enterprises which employ well-paid expert teams to handle their innovations?

V. Marjanović: There are a lot of publications regarding this particular topic. Most authors feel that the advantage of smaller companies lies in the speed with which they can implement the innovation, and also in a smaller risk because they’re not burdened with defending their leading market position and profit margins. I feel that both small and large companies can indeed be innovative and that an old Serbian proverb applies here: “The battle is fought by a hero’s heart.” meaning devotion, courage and persistence.

BIF: Based on your experience in the US, which mechanisms would provide the quickest results in developing financial support for innovative projects?

V. Marjanović: The financial model used in the Silicon Valley is the most profitable form of supporting innovative projects. Market competition between innovators and investors alike is the best way of stimulating innovation. This model isn’t applicable to all industries in all cycles which the industry sectors go through, but in those cases where it can be applied, it creates excellent results. As one of Apple’s first employees said: “If you have an idea and you’re unable to implement it, you have nothing.”

New chance by the end of the month

All interested Serbian companies can apply until September 30th 2013 for a new round of financing at the Innovation Fund through its programs: Mini Grants, aimed at startups, and Matching Grants, designed for further development and commercialization of innovative products or services. The Innovation Fund has approved over EUR 2.1 million in June this year for 18 companies out of 125 that applied during that call for proposals, and since its official operative launch in 2011, over EUR 4.7 million has been approved for 41 projects chosen amongst more than 300 proposals.

Source: Magazine “Biznis & Finansije”

More information on http://www.innovationfund.rs/vladeta-marjanovic-chairman-innovation-funds-investment-committee-good-engineering-bad-selling-ideas.